You can close an options position, sometimes known
as exiting the position, at any time before expiration, and there's
always more than one alternative. The exit strategy you choose
as well as your timing can determine whether you realize a profit
or a loss on a particular trade, however, so it's important
to plan how you'll exit before you open the trade.
Options holders have more flexibility than writers
when deciding how to exit, since they always have the choice of
whether or not to
exercise.
Options writers must fill their obligations if they're assigned,
so exiting decisions need to be made early.
Watch your timing
Timing is important for both options holders and
writers. As expiration nears, an option's time value drops
quickly, which means options holders might recover less of what
they paid in premium by closing out their positions.
